Focus on Ethics as a Way to Battle Through Pandemic: The E&C Pulse - April 1, 2020

April 1, 2020 Ben DiPietro

April 1, 2020

Focus on Ethics as a Way to Battle Through Pandemic

 

It’s hard to play a game when the yard markers keep changing, and the goal posts are swaying. That’s kind of what it feels like these last few weeks, as the battle against the COVID-19 virus changes the way we live, interact, and do business.

 

Organizations and people are feeling adrift, and are searching for ways to mount an effective response to this deadly viral outbreak. Companies would do well to focus on their ethical culture as the way to manage through this crisis.

 

“Telling everyone to follow rules without focusing on why we have to self-isolate, and the consequences if we don’t, is a very self-limiting approach,” said LRN’s Susan Divers. “The self-isolation only really works if everyone signs onto protecting the community.”

 

It’s the same approach ethics and compliance programs take when working to prevent misconduct, as building and sustaining an ethical culture is the only effective means of preventing gross violations of rules, as many recent scandals suggest, she said. It’s all about getting buy-in from all the people involved to work for the common goal.

 

“Layers of rules and procedures are only effective if the underlying culture is aligned with them in spirit, as well as the letter,” said Divers, an author of LRN’s 2020 Ethics & Compliance Program Effectiveness Report.

 

Misconduct scandals are scarily and eerily similar, in that many occur at organizations that, on paper, appear to have strong E&C programs. As their scandals show, though, they were lacking a robust, open, and inclusive culture--and that manifested itself in executives who knew of problems but didn’t act, and of companies taking retribution against those who spoke out.

 

“Incorporating values into business decisions, embracing organizational justice, ensuring employees can speak out without retaliation, and taking a values-driven, transparency-based approach to governance within an organization are the pillars of ethical culture,” the report states. 

 

“An organization’s ethical culture determines whether its rules and procedures will be followed, ignored or circumvented, no matter how thick the rule book may be.”

 

The report found companies that balance compliance risks that arise in pursuit of new business or greater revenue with effective mitigation measures and controls are:

  • 4.3 times more likely to have employees who question decisions when they conflict with organizational values;
  • 3.8 times more likely to have employees who do the right thing, even if it’s not in their personal best interest; and
  • 3.2 times more likely to have employees who speak up or speak-out, even in front of managers.

Overall, high-performing programs go beyond the minimum required by law, regulation or procedures, and ask their employees to live their values, not merely follow the rules. 

 

“They use the same standard of justice for everyone, regardless of status or rank and ensure that employees can raise concerns without retaliation,” the report states. “That, in turn, creates and sustains an ethical culture, which is the only meaningful defense against misconduct.”

 

                                                                                                            BEN DIPIETRO
                                                                                                       @BENDIPIETRO1
                                                                                       BEN.DIPIETRO@LRN.COM


THE ELEVEN

Two differing perspectives on the role tech should play in fighting COVID-19: one says tech needs to lead, the other says tech must follow.

 

The New York Times reports on how COVID-19 is affecting Latin America. The Center for Global Development explores the virus' impact on low-income areas.

 

Esquire has a story on how COVID-19 will change the world over the next 18 months.

 

Rashmi Airan writes on the Ethics and Compliance Blog about the need for ethical leadership in social distancing.

 

Lumen's Lisa Beth Lentini Walker writes about maintaining well-being during a time of crisis and grieving.

 

The virus could lead to the end of many charity organizations, CNN reports. HBR reports on how the virus will upend supply chain management.

 

Crisis management expert Jennifer Janson writes on LinkedIn about communicating in a pandemic world.

 

Compliance Week reports on the trend of business leaders taking pay cuts for the duration of the pandemic.

 

France's anti-corruption agency released a report looks at how anti-corruption laws are applied around the world, FCPA Blog reports.

 

A U.K. government report offers an update on its efforts to fight human slavery.

 

Jeff Kaplan and Rebecca Walker write in Corporate Compliance Insights about assessing incentives in an E&C program.

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